Pro-independence activists in Taiwan protest against Lien Chen's visit to Beijing.

China and Taiwan should "resume talks on an equal footing as soon as possible", Hu told Lien Chan, former chairman of Taiwan's main opposition Nationalist Party, who led a delegation of 170 business leaders to attend a two-day economic and trade forum.

Throughout his speech, Hu stressed the importance of peace between the mainland and the self-ruled island Beijing claims as its own and has threatened to retake by force if it formally declares independence.

Fence-mending talks between Beijing and Taipei have been suspended since 1999 when then-president Lee Teng-hui redefined bilateral relations as "special state to state". China considers Taiwan a province, not an independent state.

Beijing has resorted in recent years to the divide-and-conquer tactics of talking to the opposition while isolating President Chen Shui-bian to force him to kowtow to its terms for talks. The United States has prodded China to deal with Chen directly.

Without mentioning Chen by name, Hu said bilateral ties had not moved forward because the island's leaders had refused to embrace the 1992 consensus in which Beijing and Taipei's previous Nationalist administration agreed that both Taiwan and the mainland were part of "one China".

"Adhering to the 1992 consensus is the important basis for realizing peaceful development between the two sides," Hu said.

Hu's overtures came on the heels of the abolition by President Chen in late February of a symbolic body and guidelines on eventual unification with China.

"We will fulfil our promises to Taiwan compatriots. There will be no change just because of momentary fluctuations in the situation or a small group of people interfering in or sabotaging" ties, Hu said without elaborating.

Lien, routed by Chen in the 2000 presidential elections and again in 2004, said on Sunday there could be no prosperity if there was no peace. He warned of possible conflict with China due to a tug-of-war between pro- and anti-independence forces in Taiwan.

The forum between the Communists and the Nationalists, who favor closer ties with the mainland, ended on Saturday when China held out a clutch of potential economic agreements intended to court Taiwan public opinion. Chen's ruling Democratic Progressive Party did not attend.

China offered aviation, agricultural and finance deals and urged Taiwan to negotiate on steadily expanding direct air flights. China also pledged to lower tariff and quarantine barriers on Taiwan-grown fruit, vegetables and other farm goods, and ease rules for tourism and investment in China.

Taiwan's policy-making Mainland Affairs Council was not immediately available for comment on Hu's comments.

In Taiwan, Chen presided over a drill simulating a "national security crisis" to test the government's readiness in case of attack, the National Security Council said in a statement issued shortly after the meeting between Hu and Lien.

Taiwan newspapers said the 20-hour drill, which started late on Saturday, simulated scenarios such as China's launching attacks on the presidential office, defence ministry, airports, harbours and power plants, and involved high-ranking officials.